Gold prices rally to its highest point in over three months as investors scramble to buy safe-haven assets in light of the political and economic turmoil resulting from the crumbling trade negotiations. The latest move that triggered the panic buying of the precious metal was China's retaliatory action to increase tariff rates on US goods coming into its country. This was a measured response against Trump's latest levies imposed on over $300 million worth of Chinese goods.

Spot gold prices increase by 1.1 percent to $1,299.30 per ounce, just a shy of the peak it had reached in April. The increase marked gold's biggest one-day percentage rise since February. Gold futures in the US also jumped by 1.1 percent to $1,301.80 per ounce as it reacts to the current economic climate.

According to commodities strategists, safe haven asset buying is now at an all-time high as investors predict an increase in geopolitical risk. With trade tensions now escalating and the currency down, equities are now under a lot of pressure, leaving investors no other choice but to seek safer investments.

Despite Trump's warning for it not to retaliate, China pushed ahead with its promise to increase tariff rates on a wide range of US goods. The move negatively affected global equity markets, even pushing US Treasury yields to record lows. The country's dollar index also suffered as it continued its downward spiral.

Prior to its peak, Gold prices had hit a session low of $1,281.35 per ounce as China's currency stumbled. China is currently one of the biggest buyers of Gold in the world. The drop in the Yuan had reached its lowest level against the US dollar since last year, affecting China's capacity to buy the precious metal.

The initial lagging of gold prices immediately bounced back as China's announced its tariffs, putting more pressure on equity futures. Analysts explained that speculative buying majorly affected prices, as investors chose to act first as they expect the worst outcome.

As gold prices increase, prices of other precious metals followed suit. Silver prices jumped by a slight 0.1 percent, bringing prices to $14.77 per ounce. However, some metal prices did go down, with platinum falling by 1.5 percent to $847.90 per ounce. Palladium also did not get a boost from the jump in gold prices, with it dropping by 2.5 percent to $1,323.51 per ounce. The fall in the aforementioned metals can be attributed to a surplus, with platinum surpluses nearly doubling when compared to last year.